CUTTING COSTS. ‘Profitability has been reset to a lower level, reflecting the impact of the changes in the business, our customer base, and our organization,’ says PLDT chief Manuel V. Pangilinan. Photo by Martin San Diego/Rappler
MANILA, Philippines – Over a thousand employees could be affected by PLDT Incorporated’s move to outsource its back-office information technology (IT) operations to American multinational firm International Business Machines Corporation (IBM).
"We will be outsourcing our IT operations to IBM. That is under discussions. Hopefully, we will [close the deal] by the 2nd quarter of the year. We will keep some of them and we will ensure 100% or bulk of them will be absorbed [by IBM]," PLDT chairman, president, and CEO Manuel V. Pangilinan said on the sidelines of a briefing in Makati City on Tuesday, March 7.
According to Pangilinan, there are "more than 1,000" staff under PLDT’s back-office IT operations. (READ: PLDT still no.1 among mobile subscribers)
"We don’t want disruption in our operations so we want to keep some of the people. Most of our IT is in Metro Manila," PLDT chief finance officer Anabelle Chua said.
This is part of PLDT’s efforts to cut costs and expenses, which contributed to the telco’s lower core net income of P27.9 billion last year, down 21% from 2015.
PLDT reported that its revenues fell to P165.26 billion in 2016, from P171.10 billion in 2015. Its expenses jumped to P140.56 billion in 2016, from 139.27 billion in 2015.
"Profitability has been reset to a lower level, reflecting the impact of the changes in the business, our customer base, and our organization," Pangilinan said in the briefing.
Moving forward, PLDT expects better financial perfomance in 2017.
The telco aims to close the year with a higher recurring core income of P21.5 billion, from P20.16 billion in 2016, mainly due to the anticipated gain from asset sales in Beacon Electric Asset Holdings Incorporated by the first half of the year.
"We are in serious discssuions with two potential buyers for asset sales stake in Beacon. The plan is to complete the sale of our remaining stake in Beacon in the course of the first half of this year," Pangilinan said.
On Tuesday, shares in PLDT plunged to P1,454 apiece, down by P16 from that of Monday, March 6. – Rappler.com